Cnh Industrial N.v. · NYSE:CNH
Cnh Industrial — FY2013 Earnings Presentation
44 slides from Cnh Industrial's earnings presentation, Jan 30, 2014
Slide 1: Q4 & FY 2013 Results Review
Exhibit 99.2 Q4 & FY 2013 Results Review January 30th, 2014
Slide 2: 2013 Executive Summary
2013 Executive Summary Merger completed Key financial results • Created a truly global capital goods player • Revenues up 4.3% at constant currency • Simplified corporate structure • Trading Margin at 7.7% • Net Industrial debt at €1.6bn Board of Directors is recommending for 2013 a dividend of €0.2
Slide 3: FY '13 financial highlights
FY ’13 financial highlights Revenues Net profit (€/bn) 25.8 25.8 (€/mn) 917 900 Up 4.3% on a constant currency Up 2% vs. last year basis, as growth for the Agricultural Flat +1.9% EPS at €0.63 Equipment, Trucks & CVs and Powertrain was partially offset by more challenging trading conditions FY ’12 F
Slide 4: Q4 & FY '13 financial highlights: Performance by segment
Q4 & FY ’13 financial highlights Performance by segment REVENUES (€MN) TRADING PROFIT (€MN) 25,785 25,778 2,063 1,985 1,783 16,056 16,006 1,554 Flat FY 2012 8,924 8,752 -0.3% FY 2013 +14.7% -3.8% 466 3,331 141 158 -1.9% 2,933 101 (98) (57) (2,128) (2,311) +13.6% -78.3% +12.1% Agricultural & Trucks &
Slide 5: Revenues growth composition
Q4 & FY ’13 Revenues growth composition Q4 2013 (IFRS, €/mn) FY 2013 7,308 25,785 1,111 26,896 7,014 294 6,934 25,778 3,361 827 994 2,933 (1,118) 3,331 (374) 985 8,924 9,056 8,752 2,698 2,786 2,689 4.2% -5.1% 4.3% -4.2% 4,052 4,175 3,899 16,056 16,815 16,006 Q4 '12 Organic Growth Q4 '13 @ constant F
Slide 6: From trading profit to net result
Q4 & FY ’13 From trading profit to net result (€mn) Q4 2012 Q4 2013 FY 2012 FY 2013 Trading profit 435 436 1 2,063 1,985 (78) Unusual items, net (77) (48) 29 (217) (117) 100 Operating income 358 388 30 1,846 1,868 22 Financial charges, net (133) (119) 14 (467) (463) 4 Investment income, net 15 31 16
Slide 7: Financial charges
FY ’13 Financial charges FY 2012 FY 2013 Average Average Rate P/L Rate P/L Outstanding Outstanding (%) (€/mn) (%) (€/mn) (€/bn) (€/bn) Capital Market (fixed) (4.5) 6.9% (310) (4.2) 6.8% (287) Short-term Debt (floating) (3.0) 5.2% (155) (3.8) 4.5% (171) Gross Industrial Debt (7.5) 6.2% (465) (8.0) 5.
Slide 8: JVs performance & CNH Industrial Capital Europe extension to Trucks & CVs
FY ’13 JVs performance & CNH Industrial Capital Europe extension to Trucks & CVs FINANCIAL SERVICES IN EUROPE th On January 28 , 2014, CNH Industrial and BNP Paribas Leasing Solutions, the two shareholders of CNH Industrial Capital Europe, agreed on the extension of the joint venture services to CNH
Slide 9: Cash Flow – change in Net Industrial Debt
FY ’13 Cash Flow – change in Net Industrial Debt 384 144 748 65 917 (1,642) (1,592) 15 (1,490) (282) (67) 50 (*) Net of Vehicles Buy-back th January 30 , 2014 Q4 & FY ‘13 Results Review 9
Slide 10: Tangible & Intangible Capex
FY ’13 Tangible & Intangible Capex * TOTAL CAPEX (€MN) FY 2013 - BY CATEGORY 1,490 1,344 +10.9% New Products & Technology (Capitalized R&D included) Maintenance & Other MAIN INDUSTRIAL PROJECTS Industrial Capacity Expansion & LT Investments • AG • China • Foshan and Urumqi plants officially inaugura
Slide 11: Balance Sheet and Liquidity position
Balance Sheet and Liquidity position st December 31 , 2013 Strong available liquidity at €6.3bn Available 1 Liquidity (€bn) Debt Maturity Schedule (€bn) • €4.7bn of cash ² €6.3 • €1.6bn undrawn under medium- term committed unsecured credit lines Well distributed debt maturities Repaid CNH Inc. $1.0b
Slide 12: Agricultural and Construction Equipment
1 Agricultural and Construction Equipment 2 Trucks and Commercial Vehicles 3 Powertrain 4 2014 Guidance 5 Appendix 12
Slide 13: Agricultural and Construction Equipment: Q4 2013 Revenues and Trading Profit
1 Agricultural and Construction Equipment Q4 2013 Revenues and Trading Profit Q4 2013 Q4 2012 Delta % Delta % Constant currency Revenues at €3.9bn up 3% at a constant currency basis thanks to a strong IFRS € AG Eq. 3,039 3,097 -1.9% +5% Agricultural Equipment performance, particularly in LATAM CE Eq
Slide 14: Agricultural and Construction Equipment: Q4 2013 Trading Profit Variance
1 Agricultural and Construction Equipment Q4 2013 Trading Profit Variance * (€mn) 65 7 (1) (0) (3) 298 264 2 (36) 7.6% 6.5% Q4 '12 Volume / Mix Pricing, net Prod. Cost SG&A R&D Other FX Q4 ' 13 * Including Financial Services figures th January 30 , 2014 Q4 & FY ‘13 Results Review 14
Slide 15: Agricultural and Construction Equipment: Inventory management
1 Agricultural and Construction Equipment Inventory management (units of equipment) Fourth quarter underproduction vs. retail at 17% Fourth quarter underproduction vs. retail at 26% * Excluding Joint Ventures Source: CNH Industrial Internal Data th January 30 , 2014 Q4 & FY ‘13 Results Review 15
Slide 16: Agricultural and Construction Equipment: Q4 2013 Industry change in unit volume
1 Agricultural and Construction Equipment Q4 2013 Industry % change y-o-y in unit volume Tractors Combines Light Heavy Q4 ’13 Industry Q4 ’13 Industry change vs. prior year change vs. prior year Worldwide ~5% ~10% Worldwide ~5% 15% NAFTA - (2%) NAFTA - ~(5%) < 40 hp - EMEA ~10% ~5% 40 hp - LATAM ~15
Slide 17: Trucks and Commercial Vehicles
1 Agricultural and Construction Equipment 2 Trucks and Commercial Vehicles 3 Powertrain 4 2014 Guidance 5 Appendix 17
Slide 18: Trucks and Commercial Vehicles: Q4 2013 Revenues and Trading Profit
2 Trucks and Commercial Vehicles Q4 2013 Revenues and Trading Profit* Revenues at €2.7bn in line with prior year (up 3.3% on a constant currency basis) with slight recovery in Europe on Euro V pre-buy positive impact, more than offset by negative foreign exchange rate (primarily in Q4 2,698 -0.3% 2,
Slide 19: Trucks and Commercial Vehicles: Q4 2013 Trading Profit Variance
2 Trucks and Commercial Vehicles Q4 2013 Trading Profit Variance * (€mn) 167 (6) (3) 8 (27) (2) (21) 6.2% 94 (22) 3.5% Q4 '12 Volume / Mix Pricing, net Prod. Cost SG&A R&D Other FX Q4 ' 13 * Including Financial Services figures th January 30 , 2014 Q4 & FY ‘13 Results Review 19
Slide 20: Trucks and Commercial Vehicles: Q4 2013 Units sold and Order intake
2 Trucks and Commercial Vehicles Q4 2013 Units sold and Order intake UNITS SOLD ORDER BOOK Overall units sold at 42.8k down 5.4% vs. last year Europe Solid order and positive Euro V / Euro VI phase in/out drive an increase of • By geography all ranges order portfolio of 25% vs. last year New Heavy E
Slide 21: Trucks and Commercial Vehicles: Inventory management
2 Trucks and Commercial Vehicles Inventory management (units of equipment) -5% Company Inventory Dealer Inventory Trucks & CVs Retail sales Trucks & CVs Production Fourth quarter underproduction vs. retail at 5% January 30 th, 2014 Q4 & FY ‘13 Results Review 21
Slide 22: Trucks and Commercial Vehicles: Industry volumes & market share
2 Trucks and Commercial Vehicles Industry volumes & market share (EU27 and LATAM) EU 27 +25.1%, due to sharp growth of Medium and Heavy for EuroV pre-buy Q4 2013 • Light +7%; Medium +35%; Heavy +53% • EU 27 at 10.6% down 0.5 p.p. vs. Q4 ’12 due to unfavorable market and products mix LATAM +0.7% • LA
Slide 23: Trucks and Commercial Vehicles: China industry volumes & market share
Trucks and Commercial Vehicles CHINA – Industry volumes & market share JVs sales up 20.1% vs. last year at 42.3k units, reaching 5.2% of the market, up 0.8 p.p. • Light Bus (Daily) at 11.8%, up 0.8 p.p. • Light Trucks (Yuejin) at 4.6%, up 0.2 p.p. • Heavy Trucks (SIH) at 5.4%, up 2.2 p.p. China Indu
Slide 24: Powertrain
1 Agricultural and Construction Equipment 2 Trucks and Commercial Vehicles 3 Powertrain 4 2014 Guidance 5 Appendix 24
Slide 25: Powertrain: Q4 2013 Revenues and Trading Profit
3 Powertrain Q4 2013 Revenues and Trading Profit Revenues at €985mn up 19.1% (+20% on a constant currency basis) reflecting business growth for both captive customer and Q4 827 +19.1% 985 +20% third parties. Sales to external customers accounted for 37% of Constant total revenue (36% in 2012) Curren
Slide 26: 2014 Guidance
1 Agricultural and Construction Equipment 2 Trucks and Commercial Vehicles 3 Powertrain 4 2014 Guidance 5 Appendix 26
Slide 27: FY '14E Guidance
4 FY ’14E Guidance “Projected improvements in operating performances in the Trucks and Commercial Vehicles and Construction Equipment businesses, coupled with continued industrial efficiencies, are expected to offset the projected decline in unit demand of agricultural product equipment forecasted f
Slide 28: Appendix
1 Agricultural and Construction Equipment 2 Trucks and Commercial Vehicles 3 Powertrain 4 2014 Guidance 5 Appendix 28
Slide 29: Agricultural and Construction Equipment: Industry drivers
Agricultural and Construction Equipment Industry drivers MONTHLY COMMODITY PRICE (US$ PER METRIC TON) MONTHLY COMMODITY PRICE (US$ PER METRIC TON) % change % change Dec-12 Dec-13 01/24/14 vs. Dec. 12 vs. Dec. 12 SOYBEANS $535 $489 -8.6% $472 -11.8% CORN $309 $198 -35.9% $169 -45.3% WHEAT $348 $292 -
Slide 30: Agricultural and Construction Equipment: Main product launches and awards
Agricultural and Construction Equipment Main product launches and awards New Tier 4B T7, T8 and T9 high horsepower New M series dozers worldwide: 750M, 850M, tractors, featuring the ECOBlue™ HI-eSCR 1150M, 1650M, 2050M technology Delivered two important heavy equipment Launched the new Tier 4A/Stage
Slide 31: Trucks and Commercial Vehicles: Main product launches and awards
Trucks and Commercial Vehicles Main product launches and awards IVECO BUS EMEA: Busworld Exhibition in Kortrijk «The All New Euro VI Range» (October 2013) Fuel Consumption NEW RANGE IVECO BUS EURO VI A URBANWAY, CROSSWAY E MAGELYS Maintenance Confirmed IVECO LATAM: Fenatran Fair Leader Tector 17t an
Slide 32: Powertrain: New product launches and awards
Powertrain New product launches and awards • New R22, 2.2 liters, 3 cylinder Tier4B engine launched, expanding Powertrain’s offering of industrial engines in the low displacement range. • Powertrain contributed to winning, by both captive and non-captive customers, with its NEF series engine the «Tr
Slide 33: Q4 '13 Revenues & Trading Profit (IFRS / €mn)
Q4 ’13 Revenues & Trading Profit (IFRS / €mn) (€mn) Q4 ’13 Change 2013/2012 Cons. Industrial Financial Cons. Industrial Financial Revenues CNH Industrial 6,934 6,664 384 (80) (49) - of which Agricultural & Construction Eq. 3,899 3,651 310 (153) (152) (2) Trucks & CVs 2,689 2,662 74 (9) 17 2 Powertra
Slide 34: FY '13 Revenues & Trading Profit (IFRS / €mn)
FY ’13 Revenues & Trading Profit (IFRS / €mn) (€mn) FY ’13 Change 2013/2012 Cons. Industrial Financial Cons. Industrial Financial Revenues CNH Industrial 25,778 24,731 1,468 (7) (49) (40) of which Agricultural & Construction Eq. 16,006 15,077 1,178 (50) (46) (19) Trucks & CVs 8,752 8,620 290 (172) (
Slide 35: Cash Flow – change in Net Industrial Debt
Q4 & FY ’13 Cash Flow – change in Net Industrial Debt (€mn) FY ‘12 Q4 '13 FY ’13 (1,239) Net Industrial (Debt)/Cash beginning of period (2,502) (1,642) 900 Net Income 170 917 716 D&A (excl. Vehicle Buybacks) 194 748 (144) Change in Funds & Others (16) 65 1,760 Cash Flow from Op. Activities bef. Chg.
Slide 36: Trucks & CVs EU27 and LATAM market share
Q4 & FY ’13 Trucks & CVs EU27 and LATAM market share Q4 ‘ 13 Delta Y-o-Y FY ‘ 13 Delta Y-o-Y EU27 10.6% -0.5 p.p. 11.0% -0.1 p.p. Light (3.5-6.0T) 11.4% -0.5 p.p. 11.4% -0.1 p.p. Medium (6.01-15.99T) 22.5% -0.8 p.p. 24.6% +0.6 p.p. Heavy (>16T) 7.2% +0.4 p.p. 7.1% Flat LATAM 11.7% +0.5 p.p. 11.0% -0
Slide 37: Net debt breakdown
Net debt breakdown (IFRS / €bn) Sep. 30, ’13 Dec. 31, ’13 Cons. Ind. Fin. Cons. Ind. Fin. 21.3 4.7 16.5 Gross Debt* 21.7 4.6 17.1 (0.1) (0.1) 0.0 Derivatives M-to-M, Net (0.1) (0.1) 0.0 (3.3) (2.1) (1.2) Cash & Mktable Securities (4.7) (2.9) (1.8) 17.9 2.5 15.4 Net Debt 16.9 1.6 15.3 * Net of inters
Slide 38: Gross debt
Gross debt (IFRS / €bn) Outstanding Outstanding Sep. 30, ’13 Dec. 31, ’13 11.2 Cash Maturities 11.0 5.7 Bank Debt 5.1 5.2 Capital Market 5.7 0.2 Other Debt 0.2 10.1 Securitization and Sale of Receivables (on book)* 10.7 8.3 ABS / Securitization 8.5 0.6 Warehouse Facilities 0.5 1.2 Sale of Receivable
Slide 39: Debt maturity schedule
Debt maturity schedule (IFRS / €bn) Outstanding 2014 2015 2016 2017 2018 Beyond Dec. 31, ’13 5.1 Bank Debt 1.8 1.1 1.6 0.3 0.2 0.2 5.7 Capital Market 0.2 1.8 0.5 1.5 1.7 0.0 0.2 Other Debt 0.1 0.0 0.0 0.0 0.0 0.1 11.0 Total Cash Maturities 2.1 2.9 2.1 1.8 1.9 0.2 4.7 Cash & Mktable Securities 0.7 Of
Slide 40: Trading mechanism
Trading mechanism CNH Industrial - common shares CNHI common shares are listed in the United States and Italy and can be Because MT maintains a participant account within DTCC, investors can traded on either the NYSE in US Dollars or MTA, managed by Borsa request their broker/financial intermediary
Slide 41: Geographic Information
Geographic Information Consistently with the organization structure, certain financial and market information in this presentation has been presented separately by geographic area. CNH Industrial defines its geographic areas as NAFTA: United States, Canada and Mexico LATAM: Central and South America
Slide 42: Financial Measures
Financial Measures CNHI monitors its operations through the use of various key financial measures that may not be comparable to other similarly titled measures of other companies. Accordingly, investors and analysts should exercise appropriate caution in comparing these supplemental financial measur
Slide 43: Safe Harbor Statement
Safe Harbor Statement Certain statements contained in this document that are not statements of historical fact constitute forward-looking statements, notwithstanding that such statements are not specifically identified. Words such as “forecast”, “projection”, “outlook”, “prospects”, ”expected”, “est
Slide 44: Group Investor Relations Team
Contacts Group Investor Relations Team Federico Donati – Head of Investor Relations Europe +39 (011) 00 - 62756 Noah Weiss – Head of Investor Relations North America +1 (630) 887 - 3745 e-mail: investor.relations@cnhind.com website: www.cnhindustrial.com th January 30 , 2014 Q4 & FY ‘13 Results Revi